Frisco soldier who lost house to foreclosure over homeowners dues gets it back

The Frisco soldier and his family who lost their home to
foreclosure while he was serving in Iraq will get the house
back.

Army National Guard Capt. Michael Clauer and his wife, May, lost
their $315,000 southwest Frisco home in May 2008 after falling
behind on Heritage Lakes Homeowners Association dues.

The Clauers sued the association and subsequent buyers in
federal court. A court-ordered settlement conference led to an
agreement this week that gives the house back to the Clauers.

A gag order prevents those involved from sharing details. But
the bottom line is that the Clauers once again will own the home in
the Heritage Lakes subdivision.

"The family is very pleased that this matter has been resolved,"
said their attorney, Barbara Hale.

But the debate over the power of homeowners associations in
Texas continues. The Senate Committee on Intergovernmental
Relations is studying possible changes to state law to ensure
protections for homeowners.

"We've heard heartbreaking stories from people who have been
fined for things that were questionable," said state Sen. Jeff
Wentworth, R-San Antonio, a committee member.

State Sen. Royce West, D-Dallas, who chairs the committee, said
he hopes to use stories like that of the Clauers in the upcoming
legislative session to make such foreclosures illegal.

"We were one vote short of having the bill put on the governor's
desk," West said of previous attempts to change the law. "Now we're
working to make sure we understand the opposition, and we're trying
to get a clear picture of what they were opposed to in the bill and
get those issues addressed."

Homeowners associations say they need protections from people
who don't pay their agreed share of a neighborhood's upkeep.

"It's a fairness issue," said Frank Rathbun, spokesman for the
Virginia-based Community Associations Institute, which provides
resources to the associations and other community groups. "They
collect fees for services and amenities. ... When enough people
aren't paying, it puts them in a bind."

Owned free and clear

The Clauers' attorney couldn't say whether the couple had to pay
any money to get back the house, which they owned
mortgage-free.

The Heritage Lakes Homeowners Association was initially owed
$977.55 in dues on the house. The association sent multiple notices
by certified mail, demanding payment. All went unanswered.

Under Texas law, a homeowners association can foreclose on a
property and sell it at auction to collect what's owed.

The two-story brick home was purchased at auction for $3,201 by
Mark DiSanti of Dallas and Steeplechase Productions. DiSanti sold
it in May 2009 for $135,000 to Jad Aboul-Jibin of Plano.

Complicating the case was Michael Clauer's service overseas. His
wife said she had severe anxiety and depression over her husband's
absence and let mail pile up. She didn't open any of the certified
letters and didn't realize the home had been sold until summer
2009, when Aboul-Jibin sent a letter asking for rent.

Hale had argued in court documents that the family was protected
from foreclosure by the Servicemembers Civil Relief Act. The
federal law protects those on active duty from certain financial
and legal obligations, including foreclosure, without a court
proceeding. Clauer was on active duty from Feb. 15, 2008, to Oct.
9, 2009, according to court records.

Attorneys for Heritage Lakes argued in court documents that
because the house wasn't in Michael Clauer's name, he had no
standing to sue under the federal act. The home was purchased by
his wife's parents and a portion was later transferred into May
Clauer's name. They also disputed the dates of his military
service.

David Margulies, a spokesman for the homeowners association,
said it routinely checks for military connections before
instigating foreclosure proceedings. He said a letter from the
military stated that Clauer was not in the service when the process
began.

The homeowners association became a target of public outrage
when news of the foreclosure spread nationwide. Association board
members received death threats.

Not paying attention

Shad Bogany, secretary-treasurer-elect of the Texas Association
of Realtors and a Houston-based real estate agent, said homeowners
associations need to be reined in.

"We've got elected officials not paying attention to the
consumer," said Bogany, who believes foreclosure should be the last
step after all collection options are exhausted.

"When there's a disagreement, who else can they call? What's the
next step?" Bogany asked. "There is no next step. If the homeowners
association isn't responding, there ought to be a neutral mediator
for people to go to with complaints."

But homeowners associations need money to maintain
neighborhoods. If dues and fines aren't collected, sidewalks and
streetlights may fall into disrepair.

And current legislation offers little choice between doing
nothing and foreclosing, said Tamika Harris, president of Blue
Creek Ranch Homeowners Association in Houston.

If a homeowner doesn't respond to the association's notices,
there's "nothing we can do," she said. "The homeowner has to
participate, and 99 percent of the time they do not. We can't force
you."

State Sen. Dan Patrick, R-Houston, said future legislatures need
to make sure that foreclosures involve court proceedings and that
the legal process is not expensive for homeowners.

"I continue to be shocked at actions of some homeowners
associations who do not seem to understand that a person's home is
their biggest investment," Patrick said.

"Most homeowners associations would never do this, but we've got
a couple groups out there that for whatever reason seem to be quick
to pull the trigger. That's unacceptable."

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